The Importance Of Insurance According To The Authors

dividuals, families, businesses, properties and assets are exposed to different types and levels of risks. In case of business insurance, financial compensation is provided against financial loss due to fire, theft, mishaps related to marine activities, other accidents etc.

Generates Long-term Financial Resources: The Insurance sector generates funds by way of premiums from millions of policyholders. And rising medical expense is of great concern. Anyone can fall victim to critical illnesses (such as heart attack, stroke, cancer etc.) unexpectedly. With a Health Insurance policy, an insured gets financial support in case of medical emergency.

Spreads Risk: Insurance facilitates moving of risk of loss from the insured to the insurer. The basic principle of insurance is to spread risk among a large number of people. You may need to dip into your savings or your family’s hard-earned money. From elderly parents to newborn children, medication and hospitalization play important role while ensuring well-being of families. Among other things, Insurance sector also encourages the virtue of savings among individuals and generates employments for millions, especially in a country like India, where savings and employment are important.

Let’s understand in detail how and why Insurance as a sector is key to development of any economy.

Provides Safety and Security to Individuals and Businesses: Insurance provides financial support and reduces uncertainties that individuals and businesses face at every step of their lifecycles. These include risk of losses of life, health, assets, property, etc. There is no denying that you will have greater peace of mind if you know that you and your loved ones are financially secure from various unforeseen situations. Uncertainties in life could crop up at any moment, such as an unfortunate death or a medical emergency. Rising medical treatment costs and soaring medicine prices are enough to drain your savings if not well prepared. Employment opportunities are increased by big investments leading to capital formation in the economy.

Promotes Economic Growth: The Insurance sector makes a significant impact on the overall economy by mobilizing domestic savings. If you have coverage for valuables and items inside the house, then you can purchase replacement items with the insurance money

Types of Insurance

Insurance is thus the need of the hour in today’s uncertain times -- evaluate your financial situation to choose a plan best suited to your future financial needs

Importance of Insurance

The world we live in is full of uncertainties and risks. You pay premiums regularly and a portion of the same goes towards life coverage while the other portion goes towards either a savings plan or investment plan, whichever you choose based on your future goals and needs

Insurance helps protect your home in the event of any unforeseen calamity or damage. Insurance is a financial product that reduces or eliminates the cost of loss or effect of loss caused by different types of risks.

Apart from protecting individuals and businesses from many kinds of potential risks, the Insurance sector contributes significantly to the general economic growth of the nation by providing stability to the functioning of businesses and generating long-term financial resources for the industrial projects. ). Medical Insurance is a policy that protects individuals financially against different type of health risks. Your home insurance plan will help you get coverage for damages to your home and pay for the cost of repairs or rebuilding, whichever is needed. For instance, with medical inflation growing at approximately15% per annum, even simple medical procedures cost enough to disturb a family’s well-calculated budget, but a Health Insurance would ensure financial security for the family. The family can also repay any debts like home loans or other debts which the person insured may have incurred in his/her lifetime

Insurance plans will help your family maintain their standard of living in case you are not around in the future. These situations also include an accident or damage to your vehicle, property, etc.

Bearing the financial impact of these situations can burn a hole into your pocket. The insurance money will give your family some much-needed breathing space along with coverage for all expenditure in case of death/accident/medical emergency of the policyholder

Insurance plans will help in protecting the future of your child in terms of his/her education. Whenever a loss occurs, it is compensated out of corpus of funds collected from the millions of policyholders.

Deepika Mathur, CEO Market, Insurance Expert since 10 years Recommends Home Shield Insurance to ensure your dream home is protected always! She also recommends tenants to opt for Home Shield Insurance to cover their valuable home belongings like portable electronics and furniture. It provides an ideal risk mitigation mechanism against events that can potentially cause financial distress to individuals and businesses. Due to the long-term nature of these funds, these are invested in building long-term infrastructure assets (such as roads, ports, power plants, dams, etc.) that are significant to nation-building. Insurance turn accumulated capital into productive investments. A large population gets insurance policies and pay premium to the insurer. Thus, insurance plays a crucial role in the sustainable growth of an economy.

Provides Support to Families during Medical Emergencies: Well-being of family is important for all and health of family members is the biggest concern for most. While it is not always possible to prevent unwanted events from occurring, financial world has developed products that protect individuals and businesses against such losses by compensating them with financial resources. They will make sure that your children are financially secured while pursuing their dreams and ambitions without any compromises, even when you are not around

Many insurance plans come with savings and investment schemes along with regular coverage. This will help them cover the costs of running the household through the insurance lump sum payout. Insurance also enables mitigation of losses, financial stability and promotes trade and commerce activities those results into sustainable economic growth and development. Thus, there is a pressing need of insurance for you and your family for proper coverage and financial support against all risks linked to your life, health and property.

Need for Insurance

Insurance plans are beneficial to anyone looking to protect their family, assets/property and themselves from financial risk/losses:

Insurance plans will help you pay for medical emergencies, hospitalization, contraction of any illnesses and treatment, and medical care required in the future.

The financial loss to the family due to the unfortunate death of the sole earner can be covered by insurance plans. These help in building wealth/savings for the future through regular investments.